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Chap009 Solution Manual(1)

B both u.s gaap and ifrs require receivables to be

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Unformatted text preview: b. Both U.S. GAAP and IFRS require receivables to be reported net of estimated uncollectibles. Further, both systems require that the expense for estimated uncollectibles be recorded in the same period when revenues from those receivables are recorded. This means that in the case of accounts receivable, both U.S. GAAP and IFRS require the allowance method for uncollectibles (unless immaterial). 9-5 Net sales Average accounts receivable $754,200 ($152,900 + $133,700) / 2 Chapter 09 - Accounting for Receivables EXERCISES Exercise 9-1 (20 minutes) Apr. 8 Cash 8,832 Credit Card Expense*...................................... 368 Sales........................................................... 9,200 To record credit card sales less 4% fee. *($9,200 x .04) Cost of Goods Sold.......................................... 6,800 Merchandise Inventory.............................. 6,800 To record cost of sales. 12 Accounts Receivable—Continental Bank....... 5,265 Credit Card Expense*...................................... 135 Sales............................................................. 5,400 To record credit card sales less 2.5% fee. *($5,400 x .025) Cost of Goods Sold.......................................... 3,500 Merchandise Inventory.............................. 3,500 To record cost of sales. 20 Cash.................................................................. 5,265 Accounts Receivable—Continental Bank.... 5,265 To record cash received on credit sales less fees. 9-6 Chapter 09 - Accounting for Receivables Exercise 9-2 (25 minutes) Part 1 GENERAL LEDGER Accounts Receivable Sales Sales Returns and Allowances Nov. 5 4,417 Nov. 21 189 Nov. 5 4,417 Nov. 21 189 10 1,250 10 1,250 13 733 13 733 30 2,606 30 2,606 Bal. 8,817 ACCOUNTS RECEIVABLE LEDGER Surf Shop Yum Enterprises Matt Albin Nov. 5 4,417 Nov. 10 1,250 Nov. 13 733 Nov. 21 189 30 2,606 Bal. 7,023 Bal. 544 Part 2 Sami Company Schedule of Accounts Receivable November 30, 2011 Surf Shop......................................................................... $7,023 Yum Enterprises.............................................................. 1,250 Matt Albin......................................................................... 544 Total................................................................................. $8,817 Comparison: The total of the Schedule of Accounts Receivable ($8,817) is proved with the balance of the Accounts Receivable controlling T-account from Part 1 ($8,817). 9-7 Chapter 09 - Accounting for Receivables Exercise 9-3 (20 minutes) June 11 Bad Debts Expense............................................. 9,000 Accounts Receivable—Chaffey Co............... 9,000 To write off an account....
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b Both U.S GAAP and IFRS require receivables to be reported...

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